US seen extending Iran sanction waivers to India

Last updated on: December 7, 2012 12:08 IST

US seen extending Iran sanction waivers to India

The United States will likely give on Friday another six-month reprieve from financial sanctions to India, South Korea, Turkey and others because they have reduced their purchases of crude oil from Iran, two US government sources said on Thursday.

The United States has worked this year with all of Iran's major oil buyers in an effort to rein in Tehran's nuclear ambitions by cutting revenue from oil sales. All of the buyers are expected to eventually receive the waivers to sanctions, known as "exceptions", in exchange for cutting purchases of oil from Iran.

On June 11, a number of countries, including Taiwan and South Africa, received their first round of reprieves to a sanctions law signed by President Barack Obama a year ago. The waivers are issued by the State Department.

Under the law, banks in countries that buy oil from Iran can be cut off from the US financial system unless the purchases are reduced.

The sanctions aim to choke funding to Tehran's nuclear program by slashing demand for Iran's oil exports. The West suspects that Iran's nuclear program is enriching uranium to levels that could be used in weapons. Tehran has said that the program is for the generation of electricity and medical purposes.

China, Singapore too?

US waivers for China, the top consumer of Iran's oil, and Singapore are due to expire on December 25, 180 days after they were issued. Both countries are expected to get waiver extensions because they have reduced oil purchases from Iran. Those waivers could also be issued on Friday, one of the government sources and an oil industry source said.

"There's nothing in the sanctions law that says the US has to wait a full 180 days to announce exceptions for China," said the government source, who asked not to be named because of the sensitive nature of the matter.

Japan and 10 European Union countries received six-month sanction reprieves from the United States in September.

US and EU sanctions on Tehran's oil exports have choked off revenue for Iran's economy, but it is unclear if they will lead to a slowdown or end to the nuclear program.

The Islamic Republic's oil shipments have been reduced by more than half this year. Its monthly crude exports are expected to decline by about a quarter in December to the lowest level since US and EU sanctions were applied this year, shipping sources have said.